This paper analyzes the influence of the structure of collective wage bargaining on direct investment abroad. A wage negotiations model shows that high productive firms benefit from centralized bargaining and invest therefore less abroad than under dezentralized bargaining. An empirical study uses firm level data from the ` Hannoveraner Firmenpanels´ in 1995 and 97. Firms with firm specific wage contracts are more often direct investors abroad than firms with centrally negociated agreements. The result does therefore not confirm the often heard hypothesis that centrally negociated agreements are not flexibel enough to take firm specific aspects into account and therefore causes relocations.